Tax Credits For Your Children After Divorce

In general, there are several different types of tax credits for parents in divorce proceedings should understand before deciding which parent may claim the dependency exemption and / or how custody should be treated in an agreement.

Tax credits for children (for parents who claim dependency)

Taxpayers can claim a tax credit of one thousand dollars for each child. In this case, is a qualifying child may be 16 years or less. The child tax credit is eliminated if your adjusted gross income is more than 75 000 per individual in the family and the taxpayers are single.

Child and Dependent Care Credit

If you are the custodial parent for the care of a qualified dependent who is 12 years or less, then you may be eligible for the dependent care credit after divorce. To qualify you must meet the following requirements:

You must maintain a home life that depends on paying at least half of the costs associated with owning and operating the home.

You must have annual income payments for child care.

In the state of your tax return can not be married (a) or widowed (a) without dependents.

Earned Income Credit (claimed by the custodial parent)

The earned income credit is a refundable credit, which is often the most valuable of all the tax credits after the divorce. It can only be claimed by the custodial parent.

Conclusion:

It is often the case that after a divorce, a taxpayer may benefit from previous tax credits to a greater extent than the other. Therefore, in negotiating a divorce settlement, you can learn from the different tax credits.